Concept of the Day
Return on Invested Capital (ROIC)
Profitability MetricsROIC measures how efficiently a company uses its capital to generate profits. A company with ROIC consistently above its cost of capital (WACC) is creating value for shareholders.
ROIC = NOPAT / Invested Capital
Look for companies with ROIC > 15% sustained over 5+ years.
Investing DictionaryQuick definitions of key investing terms